Fear spreads as global markets brace for a fresh investor exit
ALL eyes will be on the markets today amid what is expected to be a sharp sell-off in bank stocks around the globe.
In London, traders and bankers worked all weekend to find out what exposure they had to the fallout of Silicon Valley Bank.
Fears are mounting that the biggest US banking failure since the financial crisis could lead to contagion and expose other lenders that were close to the technology sector.
While many investors say it is too early to call this a ‘Lehman’s moment’, others fear that after years of record low interest rates other banks could also now be in crisis. Analysts anticipate HSBC, Lloyds, Barclays, Natwest and Standard Chartered will all be sold off sharply after having nearly £10bn wiped off their share prices on Friday. The selloff in the sector weighed on the FTSE 100, which ended the day down 131.63 points, at 7748.35.
Other firms being closely examined include companies such as Molten Ventures, which had a £150m debt facility with SVB.
Any lender with heavy technology exposure could be viewed as a risk, one analyst explained.
In Paris, Societe Generale and BNP Paribas will be monitored closely. In the US, JP Morgan, Citigroup, Morgan Stanley, Goldman Sachs and Bank of America will also struggle after turbulent trading last week.
One trader told the Daily Mail: ‘I think there is real fear going into the first trading session of the week. This is very serious.’